Foreclosure is the process through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Ishpeming, Michigan has repeatedly failed to make their payments. When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy way to do this.
In every state, including Michigan, there is an option to go through foreclosure by a judicial sale, which is a procedure in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and finally to the debtor if anything is left. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take ownership of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the debtor for the remaining balance once it sells the house. You should consult a Lawyer in Ishpeming, Michigan to find out if this is the case here. This typically does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Michigan?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Ishpeming don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are forthright with them, lenders will typically try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't reach a solution with your lender, there are other options. You could, for example, try a "short sale," which allows you to sell your house for whatever amount you can get, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank will get the proceeds of the sale, and the rest of the debt will be forgiven. You might also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Ishpeming, Michigan Attorney Help?
If you are worried about foreclosure, a good Ishpeming, Michigan real estate Lawyer might be able to help. A Lawyer can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.